A brand new report from advisory agency Aite Group, that was commissioned by change platform eToro, reveals there are nonetheless obstacles hindering institutional adoption of crypto.
Based mostly on interviews with 25 institutional market individuals, the report states the crypto market might attain a $2 trillion market capitalization if extra institutional gamers had been to get on board amid extra favorable situations. These corporations could be extra prone to undertake crypto if there was much less regulatory uncertainty, a developed market infrastructure, and fewer threat surrounding safety.
“2020 was the yr when many institutional traders corresponding to banks and conventional asset managers started to both spend money on crypto or critically take into account doing so, with a number of touting the asset class — significantly Bitcoin — as an inflation hedge,” mentioned eToro head of enterprise growth Tomer Niv.
“Solely by widening the enjoying area and facilitating extra participation will crypto attain and preserve a market cap of $2 trillion and past.”
The report listed different key elements that would drive institutional traders to the crypto area. They embody a “standardised international regulatory regime” in addition to a dependable market infrastructure that would present assurances to establishments who’re cautious as to how crypto will likely be regulated of their jurisdiction.
As well as, the report cited “technical complexity” as one other barrier to beat. Some individuals expressed issues over the dangers of storing personal keys, however acknowledged the advantages of crypto chilly storage. Niv added:
“It’s encouraging to see that the following part of the crypto trade’s evolution is underway with extra participation from establishments […] Extra must be achieved from a market infrastructure standpoint to make this group of traders really feel comfy becoming a member of the crypto ecosystem.”
Institutional gamers enormously contributed to the expansion of the crypto market in 2020. Enterprise intelligence agency MicroStrategy’s preliminary $425 million Bitcoin (BTC) wager and subsequent crypto purchases final yr together with digital asset supervisor Grayscale Investments continually rising its belongings below administration led BTC to all-time excessive costs.
The following rally for a lot of tokens resulted within the complete cryptocurrency market capitalization breaking $1 trillion for the primary time in early January.